Five more local banks will begin settling yuan credit-card transactions in Hong Kong this month, and two of them plan to issue yuan credit cards to Hong Kong residents by July.
Breaking a monopoly held by the Bank of China Hong Kong (BOCHK), the five banks - Hang Seng, HSBC, Standard Chartered, Bank of East Asia and DBS - signed an agreement with China UnionPay last Friday. Shanghai-based UnionPay manages the country's bank-card payment and clearance system.
By the end of this month, Chinese residents will be able to use their UnionPay-authorised credit cards at Hong Kong outlets using the banks to settle credit-card transactions. Previously, only merchants using BOCHK could accept mainland credit cards.
HSBC said residents with UnionPay-linked yuan credit cards would be able to shop at more than 300,000 designated mainland outlets.
Since February, Hong Kong banks have been permitted to conduct limited yuan business locally - including taking deposits, carrying out remittances and currency exchanges and issuing credit cards.
Following an upgrade of the local point-of-sale network, merchants should be ready to accept mainland UnionPay cards in time for an expected surge in tourist arrivals during the week-long May 1 national holiday.
